Revival in market sentiments and performance of equity funds has revived retail interest in equity funds.
With the revival in market sentiments, retail investors are flocking to equity funds in hordes.
The
latest AMFI data shows that retail folios in equity funds have risen by 10.02
lakh from March till December 2014. The
total retail folio count has risen from 2.86 crore in March 2014 to 2.96 crore
as on December 2014. Distributors say that new fund launches coupled with new SIP
registrations in existing funds has led to an increase in retail folios.
During the same period, the retail equity AUM
increased by Rs. 53,763 crore from Rs. 1.27 lakh crore to Rs. 1.81 lakh crore. After
taking into account other categories like HNIs, corporate, banks and FIIs, the total
equity AUM of the industry has increased from Rs. 1.91 lakh crore to Rs. 3.19
lakh crore during the same period. The increase in equity AUM was partly due to
mark-to-market gains.
The stellar performance of equity funds has been the key reason
for the revival in retail interest. Over a one year period, mid and small cap
funds delivered 82% absolute return, followed by banking sector funds (72%),
infrastructure funds (69%), and multi cap funds (59%), shows Value Research
data. (All numbers here refer to the
category average)
Balanced funds
While balanced funds category has delivered good returns over a
one year period (44% absolute), the retail folios in this category have dropped
by 7.28 lakh from March till December 2014. The total retail folios in balanced
funds dipped from 25.48 lakh in March 2014 to 18.20 lakh in December 2014.
Gold ETFs
Gold ETF folios dipped by (14,020) from 4.89 lakh in March to 4.75
lakh in December. Gold ETFs has been the worst performing category, delivering
-4% return over a one year period, shows Value Research data.
ETFs, which track the equity indices, are increasingly getting
popular among retail investors. Retail folios in this category have risen by 20,535
from 1.94 lakh in March to 2.15 lakh in December 2014.
Overseas fund of funds
This category is seeing continuous erosion in folios. From March
till December, retail folios in overseas fund of funds dropped by 23,634. Value
Research data shows that the category has delivered a paltry 0.29 % return over
a one year period. Barring a few US funds, most of the funds have delivered
lackluster performance. Funds having exposure to mining, commodities, Brazil
and Europe have been the worst hit.
Debt
Debt funds have also seen good traction in retail category. Retail
folios in debt funds have increased by 2.34 lakh from 58 lakh in March to 60.34
lakh as on December 2014. Distributors say that accrual funds have seen good
traction among retail investors.
